As of September 2009, acquiring a loan requires having a credit score of 600 or higher, having collateral, and if necessary a co-signer. Before applying for a loan, determine how the loan will be used, how much you can afford to pay back monthly and the interest rate. Whether you're applying for an education loan or a personal loan, borrow enough to cover the cost of expenses, and resist using it for unimportant purchases. High interest rates can tack on several hundred dollars on to the original payment amount, making your loan repayment higher or lengthier.
Apply for a loan through private companies or banks and credit unions.You must be a U.S. citizen and provide your employer information and length of employment, a Social Security number and your current mailing address. Your credit score can improve your chances of approval, and must be 600 or higher. Lenders will check your credit using one of the three credit bureaus: TransUnion, Experian or Equifax. Having property such as a mortgage or a car title is considered collateral, which can be used to obtain a loan. If default on payment of your loan, the bank can seize your home and car to recoup its loss. Some lenders require you to have a co-signer, a creditworthy person who will be able to make payments for your loan if you are unable to.
Private Lending Networks
A peer-to-peer lending network is an alternative if you'd rather not borrow from an institution. Enter in your requested loan amount and interest rate. Your loan is auctioned, where lenders can compete for your loan. Your interest rate decreases as the lenders continue to bid. Once the auction is closed, your loan is deposited into your bank account. Your monthly payments plus interest will be automatically deducted from your account until it is paid off. According to Prosper, you must meet the following requirements: a U.S. citizen, a bank account, a credit score 640 or higher and a Social Security number.
Student loans are available through the government or through private lenders, and can be used to cover the cost of tuition, books and materials. Government student loans are also easier to receive, and have a lower interest rate than other financial institutions. These loans are through Direct Loans, and you must fill out a free application for financial student aid. After completion, you will receive a letter that notifies you of your Stafford loan. To receive your loan, you must be a full-time student at an accredited college and a U.S. citizen or resident alien. If you are a male, you must register with Selective Services before you can be approved.